"I'm glad they’re doing it via acquisition," said Don Gulling, president of Verteks Consulting, an Ocala, Fla.-based solution provider. "You've got customers and recurring revenue already. You've got a management and execution team of people who know how to run a hosted NOC and guys who know how to sell hosted voice. And besides, if ShoreTel were to have decided six months or a year ago that they really wanted to build something else to go after this, it would just take too long."

"Obviously, they didn't do well trying to build it themselves, so they purchased it," said Dave Casey, CEO of Westron Communications, a Carrollton, Texas, solution provider. "I understand running it as a separate entity: protecting the existing channels, keeping the customers satisfied. All that's cool."

"It's long overdue," said Randy Marcotte, co-founder and director of sales for Perfect Video Conferencing, a video/UC VAR and managed services solution provider. "ShoreTel missed the boat for about three years now in not creating their own cloud or giving partners deeper discounts on core infrastructure so we [could] do that for them. It was time."

Under the terms of the deal, which ShoreTel unveiled Wednesday, M5 shareholders will receive about $84 million in cash and 9.5 million shares of ShoreTel stock, equating to about $146.3 million in initial consideration, with an additional $13.7 million payable over two years if certain revenue performance milestones are hit. It's a roll of the dice by ShoreTel no matter how it's looked at, not least for the fact that the initial $84 million for M5 represents nearly three-quarters of ShoreTel's reported $115.9 million second-quarter 2012 cash balance.

"It's pretty clear they're cleaning out the shelves to do this," said Casey.

"This is [ShoreTel CEO] Peter Blackmore's blockbuster. Maybe they make some very small acquisitions, but this is the big one," added Gulling.

For all intents and purposes, however, it was worth that roll of the dice. M5, a survivor of the first wave of hosted VoIP and application service provider companies in the early 2000s, has continued to grow, and last year posted what ShoreTel said was high $40 millions in revenue. M5 has about 2,000 customers and 75,000 end users.

"Their average revenue per subscriber is in the mid-60s," said Don Girskis, senior vice president of worldwide sales at ShoreTel, in an interview with CRN. "That's an industry-leading average, and that kind of ARPU [average revenue per user] relays a strong message. There are a lot of areas where we think we can complement each other."

M5 brings a number of other assets to the table. All of its products run in a hosted delivery model, from hosted call recording to conferencing to business intelligence and analytics. Key to its managed hosted UC solution is the M5 Call Conductor, which M5 developed in-house and used to replace its former Broadsoft service delivery platform in 2010.

That expansion made M5 the largest dedicated hosted VoIP player in the country, though the market is still quite fractious. Research firm Gartner puts M5's market share in the unified-communications-as-a-service market at about 7 percent -- single digit, yes, but that’s in a market where no one particular player has more than 10 percent.

And the market M5 plays in is one that customers care about, solution providers said.

"They're well-positioned. It's a mature product and I think they've got a good reputation from everything I've seen," Casey said. "And we are seeing an uptick in hosted, particularly in the UC space. There are a lot of customers deep into application integration and looking at the UC side of things and saying, ‘We already run this part of our company on Salesforce.com, why would we not try to do the same with our phone system?’ "